By Alyssa Landers
On Saturday, leaders of the world’s largest and most powerful nations gathered in London at the G20 Summit to discuss plans for international economic reform. On the agenda were issues central to economic recovery, including tougher bank regulation policies, trade stimulation between nations, and bailouts for the developing world.
Yet surprisingly enough, one of the central issues that almost toppled the precarious coming together of nations was the seemingly trivial topic of tax havens.
France—a nation that, like most of Western Europe, has put big pressure on nations like the United States to implement strict regulatory measures on its banks—sharply emphasized, in addition to advocating stringent bank reform, the necessity of elimination tax havens in places like Switzerland, the Caribbean, as well as Hong Kong and Macao in China.
French President Nicolas Sarkozy brought specific attention to the word “endorse” in the document, highlighting the fact that all G20 nations should be active in “naming and shaming” such tax havens.
Chinese president Hu Jintao, however, was not impressed. Not only was Jintao angered by Sarkozy’s demand that China adhere to endorsements by the Organization for Economic Cooperation and Development (a coalition of wealthy nations that does not yet include China), but was also furious at the implicit accusation that China, a Communist nation with a history of severe state control, does not keep a close eye on its constituents. Accordingly, the Chinese president refused to agree to the document while the word “endorse” remained.
Reportedly, it was President Obama, who had spent much time with Sarkozy in France in the days preceding the conference, who intervened in the dispute. The president took each leader into a corner of the room, urging them to “see the big picture.” Finally, an agreement was reached as the word “endorse” was changed to “note.”
The final communiqué from the conference emphasized the point that “prosperity is indivisible” and that “growth, to be sustained, has to be shared,” and made clear that open and active global trade is the only way to sustain economic recovery. President Obama openly acknowledged the fact that he is committed to pursuing an open market economy and supports the stimulation of international trade in this time of crisis, and that the prosperity of the American people is his top priority right now.
“It is…my responsibility to lead America into recognizing that its interests, its fate, is tied up with the larger world.”
Yet surprisingly enough, one of the central issues that almost toppled the precarious coming together of nations was the seemingly trivial topic of tax havens.
France—a nation that, like most of Western Europe, has put big pressure on nations like the United States to implement strict regulatory measures on its banks—sharply emphasized, in addition to advocating stringent bank reform, the necessity of elimination tax havens in places like Switzerland, the Caribbean, as well as Hong Kong and Macao in China.
French President Nicolas Sarkozy brought specific attention to the word “endorse” in the document, highlighting the fact that all G20 nations should be active in “naming and shaming” such tax havens.
Chinese president Hu Jintao, however, was not impressed. Not only was Jintao angered by Sarkozy’s demand that China adhere to endorsements by the Organization for Economic Cooperation and Development (a coalition of wealthy nations that does not yet include China), but was also furious at the implicit accusation that China, a Communist nation with a history of severe state control, does not keep a close eye on its constituents. Accordingly, the Chinese president refused to agree to the document while the word “endorse” remained.
Reportedly, it was President Obama, who had spent much time with Sarkozy in France in the days preceding the conference, who intervened in the dispute. The president took each leader into a corner of the room, urging them to “see the big picture.” Finally, an agreement was reached as the word “endorse” was changed to “note.”
The final communiqué from the conference emphasized the point that “prosperity is indivisible” and that “growth, to be sustained, has to be shared,” and made clear that open and active global trade is the only way to sustain economic recovery. President Obama openly acknowledged the fact that he is committed to pursuing an open market economy and supports the stimulation of international trade in this time of crisis, and that the prosperity of the American people is his top priority right now.
“It is…my responsibility to lead America into recognizing that its interests, its fate, is tied up with the larger world.”
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